This week saw the publication of the British Government’s International Development Committee’s report, on which we have already blogged. The committee focused much of its report on what it regarded as the deplorable delay in BAE Systems paying over to the people of Tanzania the agreed sum of reparation representing proceeds of sale of the air traffic control system it sold (prosecutors say illegally) to the Government of Tanzania.

A number of individuals and organisations were invited to submit written evidence to the committee, including Transparency International. It made some interesting and we believe very thoughtful suggestions to the committee. We quote part of the evidence which TI submitted on this subject:

 

II. Resources for Law Enforcement and its Coordination

23. The relevant questions raised in the IDC’s notice are as follows:

Whether the UK prosecuting authorities have the resources and powers they need to prosecute transnational financial crimes, particularly when there are also criminal proceedings in another jurisdiction in respect of the same issue.

How the Government co-ordinates its policy against transnational financial crime.

Resources

24. The investigation and prosecution of transnational financial crimes, especially when they involve multiple jurisdictions, can be complex, time-consuming and therefore relatively more resource-intensive than law enforcement in other areas. During the past few years, the SFO has been involved in multi-jurisdiction cases, notably those involving BAE and Innospec. Provided the extra-territorial reach of the Bribery Act has not been weakened by certain parts of the Government’s final Guidance to companies under Section 9, it is possible that UK law enforcement will become involved in a larger number of multi-jurisdiction cases.

25. The issues of resources and the institutional arrangements for law enforcement against financial crimes are of increasing concern to TI-UK. The budget of the SFO, which leads the UK’s enforcement efforts, has already been reduced substantially. It is reported that the SFO is to be disbanded with its investigative function merged with a new National Crime Agency (NCA) (expected to be set up in 2013) and its prosecutorial function subsumed into the Crown Prosecution Service. Since the NCA (into which the Serious Organised Crime Agency will be subsumed) is expected to have a mandate to focus chiefly on antiterrorism and organized crime, there is a danger that the prosecution of bribery will be given a much lower priority. The separation of the investigatory and prosecutorial functions may also have an adverse impact on law enforcement against bribery. The Home Office has stated that, “No decisions have been taken” on institutional restructuring. Unfortunately, uncertainty about the future has led to the departure from the SFO of several senior prosecutors in recent months.

26. TI-UK recommends that adequate financial and human resources should be allocated for the effective prosecution of transnational financial crimes. Any changes to the institutional arrangements for the investigation and prosecution of foreign bribery should not result in fewer resources for enforcement, a downgrading of the priority given to combating foreign bribery and a fragmentation of responsibility for investigations and prosecutions among different agencies.

Coordination

27. Several government departments and agencies are currently involved in combating transnational financial crime and there is clearly scope for improved coordination. It is unclear how the changes the Government proposes to make to law enforcement will affect coordination. The lack of transparency in this area could be remedied through publication by the Government of its proposals and a proper public consultation. Furthermore, the publication of an annual Action Plan for combating international corruption, including transnational financial crime, and periodic reviews of its implementation would make transparent the UK’s priorities, the resources devoted to them, and the effectiveness of activities to implement the Plan. A number of benefits can be expected to flow from mechanisms to improve co-ordination, oversight and reporting, including more efficient use of scarce resources by avoiding duplication of effort and consistency in policy across departments.

28. TI-UK makes the following recommendations to increase transparency and improve co-ordination, oversight and reporting:

A public consultation on the Government’s proposals for re-organising the machinery for law enforcement against financial crime;

Annual progress reports by the Secretary of State for Justice, who is the Government’s Anti-Corruption Champion, on the implementation of the Action Plan;

Creation of a new House of Commons committee to provide oversight of the implementation of the Action Plan – this committee could be made up of members of the following committees (recognising the cross-cutting nature of efforts to tackle corruption and transnational financial crimes): Business, Innovation and Skills; Defence; Foreign Affairs; International Development; Justice; and Treasury; and

Establishment of a cross-Whitehall group of officials to coordinate cross-Departmental work to deliver the Action Plan.

In short, TI is recommending better communication between all those in government who are involved in the prevention of international financial crime and better reporting so that the public and others can identify what the Government is actually doing and achieving in this regard. This will also employ scarce resources more economically. We at the BriberyLibrary wholly endorse TI’s recommendations which must surely be unarguable.

One example of where the left hand of government doesn’t know what the right hand is doing (at least by appearance anyway) is that the SFO is against the introduction of rewards for whistleblowers, whereas the Office of fair Trading, which of course regulates and prosecutes inter alia UK competition rules, reportedly does pay rewards of up to £100,000. We have blogged on this subject before. It makes no sense to us that one UK prosecutor has adopted this reward system whereas another takes the contrary view. Joined up thinking from Government should not be difficult to achieve.  How can we expect enforcement cooperation at an international level if there is an inadequate level of communication at national level?